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Sri Lanka to restart IMF bailout talks, president calls for unity government

COLOMBO: Sri Lanka will restart bailout talks with the International Monetary Fund (IMF) in August, its new president said on Wednesday, while calling on lawmakers to form an all-party government to resolve a crippling economic crisis.

In a speech in parliament, President Ranil Wickremesinghe said that constitutional amendments were required to curtail presidential powers — indicating he would meet a key demand of protesters who forced out his predecessor, Gotabaya Rajapaksa.

“The president of a country does not have to be a king or a god who is exalted above the people. He or she is one of the citizens,” Wickremesinghe said.

The island nation of 22 million people is facing its worst financial crisis since independence from Britain in 1948 with its foreign exchange reserves at record lows, and the economy battered by the COVID-19 pandemic and a steep fall in government revenue.

Angered by persistent shortages of essentials, including fuel and medicines, and sky-rocketing inflation of over 60% year on year, hundreds of thousands of people took to the streets in early July, forcing Rajapaksa to first flee the country and then quit office.

Wickremesinghe, who was then prime minister, took over as acting president and was later confirmed in the job by parliament.

Discussions with the IMF for a four-year programme that could provide up to $3 billion would resume in August, Wickremesinghe told lawmakers in his first major address to parliament since taking over.

The government is working with its financial and legal advisers Lazard and Clifford Chance to finalise a plan to restructure overseas debt, including about $12 billion owed to bondholders.

“We would submit this plan to the International Monetary Fund in the near future, and negotiate with the countries who provided loan assistance,” Wickremesinghe said.

 

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